SPR authorization, fossil fuel research in pending spending measure

Maureen Lorenzetti
Washington Editor

WASHINGTON, DC, Jan. 27 -- Congress last week moved closer to completing a long-delayed federal budget for fiscal year 2003, with the US Senate passing a $390 billion appropriations bill Jan 23.

The House and Senate must now reconcile two different spending proposals and settle on a final "omnibus" bill that sets spending levels for most federal agencies through Sept. 30. So far it is unclear what, if anything, would provoke a White House veto.

Included in the bill are annual budgets for key agencies that regulate oil and gas companies, large and small. This includes the budgets for the departments of Interior and Energy, the Environmental Protection Agency, and operating funds for the Federal Energy Regulatory Commission and the Securities and Exchange Commission.

Senators considered more than 200 amendments to the measure, which combines 11 of the 13 annual appropriations bills that fund the federal government. Two military spending bills passed Congress and were signed into law last year.

Senators approved by voice vote a plan by Sen. Jeff Bingaman (D-NM) that gives the president permanent authority to draw down the Strategic Petroleum Reserve in case of an emergency. Congress typically reauthorizes the president's ability to use the SPR every 2 years, but a possible war with Iraq and the current supply woes from Venezuela justified giving the president permanent authority, bill sponsors said. The amendment also directs the Department of Energy to fill the reserve to capacity, even if Congress chooses to expand the stockpile beyond its current 700 million bbl limit. The proposal is expected to win support from the House and the White House.

Senators also approved by voice vote an amendment sponsored by Alaska Sens. Lisa Murkowski (R) and Ted Stevens (R) allowing the Department of the Interior to renew the right-of-way for the Trans-Alaska Pipeline without extensive environmental reviews.

Even with the new Republican majority, the Senate remains opposed to most offshore oil drilling as evidenced by two measures now in the bill. Mike DeWine and George Voinovich, both Republicans from Ohio, sponsored a largely symbolic measure that extends a 2-year ban on drilling in the Great Lakes. Similarly, Sen. Barbara Boxer (D-Calif.) won support for nonbinding language that calls on Interior not to spend staff resources related to the exploration or development of 36 disputed leases off California. The state wants the federal government to buy back the leases.

But that interest in supporting so-called "green" issues extended only so far. Senators narrowly defeated a measure by a 50-46 vote offered by Sen. John Edwards (D-NC). That measure sought to delay an EPA proposal that streamlines a permitting provision of the Clean Air Act called "new source review." NSR is supposed to ensure power generators and refiners do not create more industrial pollution when they expand operations.

Environmental groups, which oppose EPA's plan, said the close vote means there could be pressure on senators to consider the issue again.

Another pending clean air item already in the Senate bill would require EPA to submit a report no later than Feb. 15, 2004 "on the practices and procedures by which states develop separate emission standards, including standards for nonroad engines or vehicles, as compared to the development by EPA of national emission standards under the Clean Air Act."

Opponents of the language say the measure would require EPA to perform legal work that industries could use to attack state pollution control standards. Industry proponents say the study would help EPA be more efficient in its enforcement of clean air rules on a state-by state-basis.

Negotiations ahead
Key policy issues regarding environmental enforcement, research, and taxes still await further debate before a final bill is sent to the White House for approval.

Funding in the $390 billion Senate-passed package is subject to a 2.9% across-the-board cut in all domestic programs, a figure likely to be challenged during conference negotiations. Those negotiations could stretch out through next month depending on what the White House is willing to accept.

Meanwhile, the White House unveils a proposed 2004 budget Feb. 3. Bush administration officials said in mid-January that the new budget seeks to increase most domestic spending by 4%, an increase of less than half of what Congress is expected to pass for the 2003 budget. Both White House and congressional officials predict there could be serious cuts in some government programs in order to help pay for increased military spending and a proposed economic stimulus package that includes deep tax cuts ($674 billion over 10 years).

Oil and gas casualties
One casualty could be oil and gas research, some industry sources predicted. Even before budget deficits were considered a problem, this White House has historically proposed dramatic cuts in the Department of Energy's fossil fuel office.

This year, with oil prices at relatively high levels, there may not be as much political will in Congress to ignore the White House's wishes on the issue, congressional staff said.

Pending 2003 issues
Under consideration in the pending omnibus bill are a myriad of spending items that impact industry directly and indirectly. These include earmarks for federally funded oil and gas research programs, environmental protection enforcement, and money to process leasing applications. Funds to inventory the oil and gas potential of federal land may also be included.

Some producers also would like to see the "Section 29" tax credit renewed. That tax incentive began in 1980 to encourage unconventional oil and gas domestic production. The comprehensive energy bill that failed last year included an extension; it is uncertain whether the tax credit will be included in this bill.

Also typically in the annual federal budget are public policy mandates: Congress this year is again expected to impose a 1-year moratorium on most offshore drilling, for example.

Related Articles

BPC report examines 40 possible options to reform RFS

12/16/2014 The Bipartisan Policy Center issued a report outlining 40 possible options for reforming the federal Renewable Fuels Standard in an effort to move ...

Senate passes Defense bill with BLM drilling permit program provision

12/15/2014 The US Senate approved a Department of Defense appropriations bill on Dec. 13 containing a provision extending and making permanent a drilling perm...

Mitigating methane

12/15/2014

Among greenhouse gases, methane should be particularly amenable to deliberate cuts in emissions.

Study: To cool climate, eat less less meat, milk

12/15/2014

Meeting stated goals for Earth's climate requires not only using pricey energy but also spurning animal protein.

API: Producers reducing methane emissions already

12/15/2014 US oil and gas producers are reducing wellhead methane emissions already and don't need ill-conceived, overly prescriptive federal regulations, Ame...

A message from Oil & Gas Journal

12/15/2014

An important transition occurred during production of this issue of Unconventional Oil & Gas Report.

EPA approves Magellan’s Corpus Christi splitter project

12/12/2014 The US Environmental Protection Agency has issued a final greenhouse gas prevention of significant deterioration construction permit to Magellan Pr...

US needs more data before ending crude export ban, House panel told

12/11/2014 Much more environmental impact information is needed before the US can reasonably remove crude oil export limits, a witness told a House Energy and...

BOEM raises offshore oil spill liability limit to $134 million

12/11/2014 The US Bureau of Ocean Energy Management increased the liability limit for oil-spill related damages from offshore operations to $134 million from ...

White Papers

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Available Webcasts



The Future of US Refining

When Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

When Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST



On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected